Growing wealth gap is a recipe for disaster

FILE- In this April 12, 2016, file photo, Facebook CEO Mark Zuckerberg speaks during the keynote address at the F8 Facebook Developer Conference in San Francisco. (AP Photo/Eric Risberg, File)

Photo: Eric Risberg, Associated Press

The rich get richer, and the poor get … Trumped. That’s the message of the latest Oxfam report on the growing chasm between the super rich and the rest of us. We’ve now reached the stunning point where just eight men — eight! — own as much wealth as the poorest half of humanity. Bay Area billionaires Mark Zuckerberg and Larry Ellison, as well as their fellow tech moguls Bill Gates and Jeff Bezos, are among these eight — which sort of calls into question the whole notion of the tech boom as the great spreader of wealth that we keep hearing about from the likes of Mayor Ed Lee and other corporate-friendly politicians.

The Oxfam report sent shudders through the World Economic Forum, the elite conclave of international business and political leaders and their celebrity courtiers that is holding its annual conference in Davos, Switzerland, this week. The privileged gathering already had its bubble burst by the populist uprisings that have rocked the United States and Europe.

For years, the exclusive Davos club — which includes such regulars as Bill Clinton and the Wall Street crowd that dominated his and President Obama’s administrations — clung to the belief that globalism would produce rising benefits for all sectors of society. But these benefits never materialized for millions in Britain who voted to leave the European Union and those in America who tipped the Electoral College to Donald Trump.

So, the anxiety is rampant this week as international movers and shakers come together in the quaint Swiss town to discuss the economic and political future. “The concern for delegates attending this year’s meeting isn’t that their forecasts are wrong, but that their worldview is,” reports Bloomberg-Businessweek. Ironically, the business publication wondering if “Davos is now part of the problem” is owned by one of those eight wealthiest men in the world — Michael Bloomberg.

Personally, I could never understand the mentality of wealthy hoarders who are driven to accumulate more and more capital at the expense of others. How much fortune do these people need to feel good about themselves? As Oxfam noted, the super rich are accumulating wealth at so fast a clip that it won’t be long before we see the first trillionaire (!) in history. “To put this in perspective,” the report dryly observed, “you would need to spend $1 million every day for 2,738 years to spend $1 trillion.”

Meanwhile, Oxfam interviewed women workers in a Vietnamese garment factory who toil 12 hours a day, six days a week and still struggle to survive on the $1 an hour they are paid. The fruits of their sweatshop labor are enjoyed by CEOs of brand-name fashion companies who are among the most lavishly paid executives in the world.

It’s labor-gouging practices like this — as well as tax dodging and gaming of the political system — that allow the grotesquely rich to keep widening the wealth gap, according to Oxfam. What are the chances that political reforms in the new “populist” era can substantially narrow this outrageous gap?

Very slim, according to Stanford University history Professor Walter Scheidel, author of “The Great Leveler,” a new history of wealth inequality from primitive times to the present that is provoking wide debate. Scheidel writes that government efforts to narrow wide income disparities through redistributive policies like progressive tax and labor reforms have historically fallen far short of their goals. For substantial income-leveling to occur, there must be a “violent societal restructuring” of an “exceptionally intense” nature. “Four different kinds of violent ruptures have flattened inequality: mass mobilization warfare, transformative revolution, state failure and lethal pandemics. I call these the Four Horsemen of Leveling.”

Scheidel’s views have been criticized as too bleak by liberal scholars, who insist that major progress can be made on economic inequality without the four major shocks to the system enumerated by the Stanford historian. “Some say pessimistic, I say realistic,” he told me in a phone conversation this week. Scheidel finds the marginal reforms advocated by liberal economists like Paul Krugman and Joseph Stiglitz to be both insufficient and politically unrealistic, unless societies are subjected to the sort of enormous stress that shook the 20th century: world war, Great Depression and communist revolution.

“Even if Bernie Sanders had won the presidency, he would’ve faced major structural obstacles to change,” Scheidel said. “The preconditions need to be in place before radical changes can take place. Any individual leader confronts the same barriers.” Even a wild card like Trump.

Scheidel predicted that Trump — despite his populist promises — will only widen the wealth gap. While Scheidel doesn’t see Trump in the same mold as Hitler, the incoming president’s vision of a corporate state — with leading industrialists and bankers in direct control of government agencies — corresponds to the classic definition of fascism. The rich got richer in fascist Germany, too, noted Scheidel. “Hitler allowed them to keep more profits while wage controls were imposed on workers and labor unions were destroyed.

“History doesn’t predict the future,” Scheidel said. But it’s possible that as America becomes more politically polarized, “we could see more social unrest which could become violent.”

“All of us who prize greater economic equality would do well to remember that with the rarest of exceptions, it was only ever brought forth in sorrow,” he ominously concludes his book. “Be careful what you wish for.”

We’re a long way from the kind of political collapse Scheidel writes about in his book. But, before we reach that point, will the global elite now meeting in Davos stabilize the world by undertaking ambitious income-leveling reforms? Has the 1 percent ever willingly sacrificed a substantial portion of its wealth for the greater good, I asked Scheidel? He laughed. “I think you just answered your own question.”

David Talbot is a longtime San Franciscan, journalist and author. “Season of the Witch,” his history of San Francisco from the 1960s to the 1980s, was on The Chronicle’s bestseller list for four years; his book “The Devil’s Chessboard: Allen Dulles, the CIA and the Rise of America’s Secret Government” was a New York Times bestseller. David founded the pioneering online news site Salon, was an editor at the Hearst-owned San Francisco Examiner and has been published in the New Yorker, Time, the Guardian, the Los Angeles Times and many other publications. His columns will run three times a week in print and online at SFChronicle.com.